People at green-technology companies will likely keep an eye on next month's global climate change negotiations in Copenhagen but they aren't betting their businesses on the outcome.
Research and events company Cleantech Group on Thursday released an analysis called "Why Cop15 Doesn't Matter," referring to the 15th conference of international climate change talks scheduled to start December 7 in Copenhagen.
With numerous political and economic issues complicating the picture, it would be surprising if a major breakthrough pact emerged next month. But whether there is a binding agreement won't have an immediate impact on the adoption of green technologies, according to research analyst Stephen Marcus, who was the principal author.
Instead, any progress in ongoing global negotiations is a more of a "milestone" toward a day when heavy polluters will need to account for the amount of greenhouse gases they emit.
"The private sector is not letting the (United Nations) bureaucracy get in the way of getting things done," said Cleantech group managing director Dallas Kachan during a conference call with reporters on Thursday. "The funds are already flowing."
The Cleantech Group estimates that between $5 billion and $6 billion in venture capital will go to green technologies, a category which received more money than software last quarter.
More significant is the amount of money and political commitment made by national governments around the world. Over the next few years, the United States will spend tens of billions of stimulus dollars to develop clean-energy industries, such as solar, wind, and plug-in vehicles. China, too, has made economic development around clean energy a national priority.
Government programs designed to promote clean-energy technologies, along with growing private-sector financial interest in green tech, will be the primary driver for investment in the short term, according to the Cleantech Group.
Writing on the wall
The U.S. Congress is now considering an energy and climate bill that calls for the creation of a cap-and-trade system to regulate greenhouse gases. Large polluters would be given a certain number of pollution permits and be able to buy and sell them to stay under a government-set cap on emissions.
On Thursday, the U.S. Senate's environment committee passed an energy and climate bill despite a boycott from Republican members. The bill faces an uncertain future as it still needs to pass other Senate committees and be reconciled with an existing House version before being passed into law.
Although one of the most discussed portions of the bill is cap-and-trade legislation, many green-technology investors and entrepreneurs say that other measures in the bill would have a more direct influence on their business plans.
For example, the bill calls for stepped-up efficiency standards and a mandate that utilities use a certain percentage of wind, solar, or geothermal energy in their power generation. By contrast, limits on carbon emissions and trading carbon permits would be phased in over several years with a percentage of the permits given away for free.
Still, there are a number of corporations lobbying for a climate bill because it sends a signal that there will be a cost attached to carbon emissions.
On Wednesday, a varied group of businesses, including large utilities, formed a new group to lobby Congress to quickly pass a climate bill now moving through the Senate. Called American Businesses for Clean Energy, the group was created to garner more public corporate support for a climate and energy bill that would limit greenhouse gases.
The initial companies are pushing for passage of a climate bill in the U.S. because they expect it to spur innovation.
"Many within the business community are urging Congress to adopt meaningful energy and climate legislation, so we can move forward with investments in technologies and infrastructure that will be needed to meet future energy demand, grow our economy, and protect our environment," Tom King, the president of utility National Grid, said in a statement.